Benedetti & Anor v Sawiris & Ors

Where several defendants have jointly benefited from services giving rise to a quantum meruit, liability may properly be joint where each accepted and benefited from the services as a whole. Several liability is not required merely because the defendants’ economic interests differ.

Interest on a quantum meruit award is ordinarily governed by Supreme Court Act 1981, s 35A, where the award is not restitutionary compensation for the time value of money. Compound interest is unavailable under that provision.

Costs remain a discretionary matter under Civil Procedure Rules 1998, r 44.3. The court must consider all the circumstances, including conduct and success on individual issues. A claimant who obtains a monetary award may nevertheless be ordered to pay the defendants’ costs.

The judgment dealt with consequential issues following an earlier judgment awarding the first claimant €75.1 million on a quantum meruit for services provided in connection with the acquisition of Wind through Weather II.

The court determined whether the defendants’ liability should be joint or several, whether interest should be awarded and, if so, from what date and at what rate, how costs should be allocated, and whether the parties should receive permission to appeal. The court also considered a stay, interim payment and security pending appeal.

1. Liability. The defendants were jointly liable for the €75.1 million award. Several liability would ordinarily reflect the benefits received by each defendant, but each defendant had accepted and benefited from the totality of the claimant’s services. Apportionment by shareholding would therefore be unrealistic.
2. Interest. Sempra Metals Limited v IRC [2008] 1 AC 561 concerned restitutionary compensation for enrichment arising from the early payment of money. The present award was a valuation of services, not an award of compound restitutionary interest. Interest was therefore awarded under s 35A of the Supreme Court Act 1981, at 1% above Euribor, from the date of judgment only.
3. Costs. The general rule under CPR 44.3 was subject to the court’s discretion. The court had to consider all the circumstances, including conduct and whether a party had succeeded only on part of its case. The claimant’s recovery of money did not prevent an order requiring him to pay the defendants’ costs.
4. Issue-based assessment. The principles in A.L. Barnes Ltd v Time Talk (UK) Ltd [2003] EWCA Civ 402 did not establish that a financially successful claimant could never lose its costs. The circumstances of the present litigation, including the claimant’s rejection of an earlier offer equal to the eventual award and failure on the principal contractual, equitable and shareholding claims, justified an order for the defendants’ costs on the standard basis.
5. Interest on costs was ordered at 1% above the appropriate base rate until judgment and thereafter at the judgment rate. The claimant was to make an interim payment equal to 40% of the defendants’ costs, satisfied by reducing the bank guarantee securing the judgment sum. Permission to appeal was granted to both sides under CPR 52.3(6), and the judgment was stayed pending appeal on provision of the guarantee.

Not stated in the judgment.